The securities industry in New York started strong in the first half of 2013, reporting profits of $101 billion, but it could have a less impressive showing in the second half of the year due to higher interest rates, litigation costs and dysfunction in Washington, according to an analysis released today by state Comptroller Thomas DiNapoli.

Wall Street had two years of record losses — in 2007 and 2008 — followed by four years of profitability fueled by low interest rates, DiNapoli said. That included three years with the highest profits on record. Profitability was strong throughout 2012, reaching $23.9 billion, the third-highest level on record and higher than any year before the economic crisis.

Profits for the first half of 2013 were close to the pace of 2012, totaling $10.1 billion, but they appear to be slowing, the comptroller’s analysis said. Earnings could be limited to $15 billion in 2013, it said.

“The political gridlock in Washington may take a bite out of the securities industry’s profits for the fourth quarter,” DiNapoli said in a statement “Washington’s inability to resolve budget and fiscal issues is bad for business. “Wall Street has undergone substantial changes since the financial crisis yet it remains profitable, contributing to the improved finances of New York City and New York state. Failure to resolve the federal budget and debt ceiling impasse could disrupt the economy and hurt New York City and New York state.”

The securities industry in New York City is smaller than before the financial crisis, the comptroller found. The number of jobs dipped to 163,400 in August 2013, a 13.5 drop in employment. The comptroller said he predicts the industry will continue to streamline itself as it adapts to the changing regulatory and economic environments.

Other findings from the analysis include:

— Unlike prior recoveries, the current economic recovery in New York City is being driven by industries other than securities, often at substantially lower pay. While New York City has added 335,000 private sector jobs — more than twice as many as were lost during the recession — Wall Street accounted for less than 1 percent of gains;

— New York state, which depends more heavily on Wall Street revenues than the city does, collected $10.3 billion in taxes during SFY 2012-13. Revenue derived from the securities industry accounted for nearly 16 percent of all state tax revenue in the last fiscal year, down from pre-recession levels of 20 percent;

— In February 2013, the Comptroller estimated that the cash bonus poolfor securities industry employees who work in New York City rose by 8 percent to $20 billion. While total compensation for broker/dealer operations increased by 5.5 percent in the first half of 2013 — suggesting bonuses might be higher in 2013 — recent developments have cast doubt on this outlook;

— The securities industry is one of New York City’s main economic engines. In 2012, the securities industry accounted for 21.9 percent of all private sector wages paid in New York City, even though it accounted for 5.1 percent of the city’s private sector jobs;

— The average salary (including bonuses) paid to securities industry employees in New York City has remained steady in recent years at $360,700. The disparity between the average salary in the securities industry and the rest of New York City’s private sector narrowed slightly but it remains at 5.2 times greater than the rest of the private sector ($69,200);

Cara Matthews is a member of The Journal News' Tax Team. She has worked as an Albany correspondent and she covered Putnam County government and politics. Before that, she worked at newspapers in Connecticut and covered the state Legislature for one of them.